Moderna snagged an upgrade Friday on the likelihood it will follow in Pfizer's footsteps in hiking the price of its Covid vaccine in 2023. MRNA stock jumped on the news.
Pfizer plans to roughly quadruple the price of its Covid vaccine to $110-$130 per dose for recipients age 12 and older. The transition to the commercial market will take place as early as the first quarter of 2023, Pfizer said in an email to Investor's Business Daily. Today, the U.S. government pays about $30 per dose of the BioNTech-partnered shot.
SVB Securities analyst Mani Foroohar expects Moderna to follow Pfizer's example.
"Presuming that Moderna prices as a rational duopolist, this substantially improves the company's ability to meet 2023 revenue guidance," Foroohar said in a report.
On the stock market today, MRNA stock jumped 8.4% to 128.32. Pfizer stock also surged 4.8% to 44.95. BioNTech stock rocketed 11.2% to 131.64. Novavax, which recently gained U.S. authorization for its Covid shot and first booster, saw shares soar 12.6% to 19.34.
MRNA Stock: Covid Shot Demand Falling
The pricing boost will help bridge the slowing demand for Covid vaccines and expectations for 2023. Analysts polled by FactSet expect $16.4 billion in revenue from Pfizer's shot and $8.4 billion from Moderna's. Those projections call for steep declines of 49% and 60%, respectively, when compared with 2022 views.
SVB Securities' Foroohar raised his price target on MRNA stock to 101 from 74. He also upgraded the stock to a market perform rating from underperform. Still, he's not totally sold on Moderna's efforts with an updated flu shot and Merck's partnership for a personalized cancer vaccine.
"We step to the sidelines and wait for a more attractive entry point on either the long or short side," he said.
Moderna representatives couldn't immediately comment on the company's pricing plans.
New Challenges In Commercial Market
Pfizer's updated pricing comes as the health emergency ends in the U.S. The company expects most commercial insurance patients will continue to pay nothing out of pocket for Covid shots. Pfizer also says it plans to provide free vaccine to eligible uninsured patients through an assistance program.
Pfizer notes the transition to the commercial market includes challenges of distributing the vaccine through multiple channels and payers, instead of strictly through the government. It's expected that will also pose a challenge for MRNA stock.
The company also expects its customers to request more single-dose vials. This will limit the amount of unused vaccine that expires. But single-dose vials are three times more expensive to make and more costly to transport than multi-dose vials.
Still, despite the jump for Moderna and Pfizer shares, both stocks remain under pressure. MRNA stock hit a recent peak in August, but has since tumbled. Pfizer stock has trended down since July.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
